Labour needs to make their mind up over the tax, writes Heather du Plessis-Allan. (Photo / NZ Herald)

We're not getting capital gains taxes on everything. That's just not going to happen. That's political suicide.

If Labour is smart, it will introduce just one CGT: a tax on investment properties.

Introduce is not really the right word. Extend would be better. Which is why it's the best compromise for Labour. Because it already exists. We already have a bright line test. Any investment property sold within five years of purchase already gets whacked with a capital gains tax.

So, extending that beyond five years wouldn't be an enormous shock. It would just be more of what we already have. Sell your rental any time, not only within five years, and you'd cop the CGT. It's easier to take a freezing plunge, when you're already a bit acclimatised to the cold water.

Which makes you wonder why in God's name Labour is taking so long to simply rule out everything else.

They could. They clearly don't want to introduce a CGT on farms or even on small businesses. So why not just out and say it.

Instead, we face another four weeks at least before Labour announces its decision.

Four weeks is a long time to leave people freaking out about the CGT, wondering whether to put the rental on the market, whether the farm will be viable, whether there's enough in the KiwiSaver account after tax to enjoy retirement.

Four weeks is a long time to leave people scared. And angry. The anger at Labour has been off the charts this past week.

You can tell that the reaction has probably taken Labour by surprise. They wheeled the PM out to tell people to chill out. That's like putting on a scary movie and telling the kids not to scream.

Labour must be relying on the fact that people will breathe a sigh of relief and forgive them once they rule out most of the proposed capital gains taxes.

It's a big risk to take.

They're kidding themselves if they think most people see these taxes as proposals from an independent tax working group. Most people surely see these taxes as Labour's own wish list. It's hard not to. Michael Cullen is a former Labour Party finance minister. And CGTs are so high on the PM's to-do list that she almost threw the 2017 election, such was her enthusiasm for introducing one ASAP.

So while we watch the clock for Labour's decision, two words are settling into our brains right next to each other. Labour. Tax.

Dangerous move.

Why the four-week delay?

Well, what else can Labour do? It's trying to polish a rock.

The swag of CGTs were a stupid political idea to start with. Now, Labour might have changed its mind. So, it needs time to explain why the hell it spent more than $800 a day for months, paying 11 people to put out a tax report it will barely touch.

Time might give the impression Labour has in tough negotiations with its coalition partners. Or give them time to spin. Or put a bit of distance between Labour and the 11 expensive members of the tax working group. Time might even be used to let you and I get used to the idea of a tax, so that whatever happens isn't as bad as we thought.

But time creates a vacuum and a vacuum is often filled by imagination. And the imagination of how much you'd have to pay in tax is not flash.

As for the best compromise position Labour could tax — which is a CGT on rentals only — it's not perfect. A tax is a tax. It could be 33 per cent on everything. It could be 5 per cent on just one thing. But few people will want to pay it.